Due to a bad economy and high unemployment, millions of American families were unable to repay the loans they took out to buy homes. Lenders then took back, or foreclosed, the homes. The nation’s biggest banks and mortgage lenders now own more than 872,000 homes. But reselling them to recover the loan money is difficult in a slow housing market, so many foreclosed properties have been sitting vacant, hurting the value of neighboring houses. Social service agencies and charitable groups are using government money to help homeless families find a place to stay, and helping neighborhoods avoid a blight of empty homes.

It’s spaghetti night at the Blomgren home, and the family is just sitting down to supper.

Brad and Sonya Blomgren, their four children, three dogs and a cat have been living in a modest tract house since losing their own home to foreclosure last August.

The family’s troubles began two years ago when the economy started to slow and Brad lost his construction job. Then his health failed, and a series of surgeries kept him sidelined for months. The last straw came when a trusted employee stole Brad’s truck and all his carpentry tools.

With supper over and the kids headed upstairs to do homework, Brad and Sonya sit down to talk about losing their home. One of Brad’s deepest regrets is that he was away when a sheriff’s deputy served the eviction papers. His teenage daughter answered the door.

“So when I came back, I find her on the floor just in tears," said Brad. "Of course, she didn’t tell the younger children. And she told me about how he had come up and, you know, gave us notice that we had to move. I was heartbroken that she happened to be the one that was home at the time.”

The family had been in denial, hoping the bank would offer a last minute reprieve, so the eviction notice caught them off-guard, without plans about what to do next.

“We loaded up the U-Haul [trailer] with having no place to go," Brad said. "That was just one of those times when you’re just like ‘OK, Lord. We’re in your hands. What do we do? Where do we go?’”

The Blomgrens are not the only ones affected. Sonya worries about the neighbors they left behind.

“It was also hard on some good friends that my kids went to school with in the neighborhood," she said. [They asked,] ‘Where are Momma and Daddy B going?’ and ‘We can’t just pop in their house anymore?’ and that kind of thing. So, that’s hard.”

A community advocacy group called The Journey Home came to the family’s rescue, settling them in this three-bedroom house.

Murfreesboro, a city of 100,000, has long had a significant homeless population, but Journey Home Director Steve Foster sees the face of that population changing.

“Between 1,600 and 2,400 folks experienced homelessness over the last 12-month period of time," he said. "We have seen a significant change in that the segment of the population, that is parents-with-children, has grown significantly.

The Blomgrens are paying a small monthly fee to The Journey Home in place of rent, but it is well below market value. Foster explains that half of what they pay is held in a savings account, to be returned to the family later for use as a down payment on a place of their own.

“As they grow in their income and employment… things get more stabilized, then we do things like get the utilities in their own name," he said. "Therefore, when they move out of our property onto the next, they already have that foundation.”

Rebuilding a stable foundation is key, and not just for the Blomgrens. The home they’re living in was a foreclosed property that sat empty for about a year. The Journey Home acquired it through a federal grant called the Neighborhood Stabilization Program or NSP. Grant recipients can use NSP funds to tear down vacant homes if they wish, but most have chosen to either repair and resell the properties to low-income families, or use them to house the homeless as the Murfreesboro charity chose to do.

“Living next door to a foreclosed upon property can have an almost viral effect on the neighborhood, dragging down the values of the surrounding properties,” said Brian Sullivan, a spokesperson for U.S. Housing and Urban Development Department, which administers the program.

“The purpose is to stabilize neighborhoods that have really experienced the hardest problems with the foreclosure crisis," he said. "The first round of funding, nearly four billion dollars, is out the door. It is fully obligated by communities and they’re putting those funds to work right now.”

The Blomgrens know how lucky they were to find shelter for themselves, much less a place that would allow them to keep their pets. Brad says the Journey Home staff were understanding of their concerns, both large and small.

“They were so gracious. They always treated us like we were precious," he said. "They always treated us like we were important. They never talked down to us. They never judged us.”

Scott Foster says the property his agency put the Blomgrens in is more than just a house - it’s a second chance.

“You know, it’s some of the best days that we have when we get to move a family in to a nice place to live," he said. "That helps them to understand good things are around the corner if they continue to work hard.”

The Obama administration has an additional three billion Neighborhood Stabilization Program dollars to spend in the coming months, but there isn’t likely to be more. In the current political climate of cost cutting, housing advocates say they do not expect Congress to approve additional funds.